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thesis entitled

The Relationship Between Characteristics of Job

Applicants and Admissions of Employee Theft

presented by

J. Martin Wahrer

has been accepted towards fulfillment
of the requirements for

Master of Science degree in Criminal Justice

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THE RELATIONSHIP BETWEEN CHARACTERISTICS
OF JOB APPLICANTS AND ADMISSIONS
OF EMPLOYEE THEFT

BY

J. Martin Wahrer

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE

Department of Criminal Justice

1987

ABSTRACT
THE RELATIONSHIP BETWEEN CHARACTERISTICS

OF JOB APPLICANTS AND ADMISSIONS
OF EMPLOYEE THEFT

BY

J. Martin Wahrer

Theft from the workplace could potentially cost
business organizations up to 44 billion dollars annually.
Yet until recent years, literature on the subject was
based predominantly on personal observations and professional
experience. Recently a trend toward the use of methodo-
logically sound empirical studies to gain knowledge on
employee theft has developed. The purpose of this project
was to determine if relationships existed between character-
istics of job applicants and admissions of internal theft.

The current study uses data from pre-employment
polygraph based interviews on employee misconduct from
599 job applicants. Characteristics examined were past
history of drug use, frequency of marijuana use, use of
drugs on the job, external economic pressures and age of
the applicant. All characteristics were tested in bivariate
relationships with admissions of employee theft. Addition-
ally, the results of controlling age, sex, and marital

status were examined.

Specifically the results of this study revealed a
series of relationships among admissions of internal theft
and tests reflecting age of the applicant and tests
affirming drug use. Additionally, the control variables
of age and marital status exhibited statisically signifi-
cant influences on these relationships.

In closing, this study indicates that certain
characteristics of job applicants are linked to admissions
of theft from the workplace. If this information is used
correctly by security and loss prevention managers a
prudent, successful strategy to combat theft from the

workplace could be developed.

To my good friends Jim, Frank, Danny

and Jerry whose friendship I will always
remember. To my parents, Nan and Joe,
whose love and guidance have always
meant more than words can express. To
my wife Vickie whose love, understanding
and patience were always available. All
of you had a part in this project. My

thanks and good wishes.

iv

ACKNOWLEDGMENTS

I would like to recognize a few people who made the
completion of this project possible. Professors Jay
Siegel and Ken Christian whose suggestions and
comments were always of assistance. Professor Frank
Horvath who spent countless hours assisting with the
organization and content. Without the help of you,

this project would not have been possible.

TABLE OF CONTENTS

LIST OF TABLES . . . . . . . . . . . . .
Chapter 1 Introduction . . . . . . . .
Theft from the Workplace . . . . . . .
Employees Who Steal . . . . . . . . .
Need for Research on Employee Theft ,
Purpose of Current Research . . . . .
Chapter 2 Literature Review . . . . . .
Theories on Employee Theft . . . . . .
Categories of Employees Who Steal . .

Organizational Costs of Internal Theft

Rates of Internal Theft Based on Empirical

Warning Signs of Employee Theft . . .

Major Research Issues . . . . . . . .

Jobs with a High Element of Employee Theft
Effect of Worker's Age on Internal Theft

Relationship Between External Economic Pressures

and Pilferage . . . . . . . . . . .

Studies

The Relationship Between Drug Use and Internal Theft.

Summary . . . . . . . . . . . . . . .
Chapter 3 Methodology . . . . . . . . .

Source of Data . . . . . . . . . . . .

- The Three Stages of the Polygraph Examination Process.

Stage 1 The Pre Test Interview .

vi

10
11
13
15
16
16
18

19
20
21
24
24
25

25

vii
Stage 2 Polygraph Testing . . . . .
Stage 3 Post Test . . . . . . . . .

Characteristics of the Sample . . . . .

Potential Jobs and Types of Businesses Involved in This

Study . . . . . . . . . . . . . . .
Operational Definitions . . . . . . . .
Dollar Amount vs. Frequency of Employee
Major Research Issues . . . . . . . . .

Research Issue #1 . . . . . . . . .

Research Issue #2 . . . . . . . . .

Research Issue #3 . . . . . . . . .

Research Issue #4 . . . . . . . . .
Control Variables . . . . . . . . . . .

Chapter 4 Results . . . . . . . . . .

Section 1 Admissions From All Applicants

Age of the Applicant . . . . . . .

External Economic Pressures . . . .
Type of Job Applied For . . . . . .
History of Drug Use . . . . . . . .
Use of Drugs on the Job . . . . . .

Frequency of Marijuana Use . . . . .

Effect of Control Variables on Major Research

All Applicants . . . . . . . . . . .
Age of the Applicant . . . . . . .
External Economic Pressures . . . .
Type of Job Applied For . . . . .

Applicants Admitted Use of Narcotics

26
26

27

28
30
31
32
33
34
34
35
35
36
36
36
37
38
38
39
40

41
41
43
43
43

viii

Section 2 Applicants with Admissions of Employee Theft .

Age of the Applicant . . . . . . . . . . . .
External Economic Pressures . . . . . . . .
Type of Job Applied For . . . . . . . . . .
History of Drug Use . . . . . . . . . . . .
Use of Drugs on the Job . . . . . . . .

Frequency of Marijuana Use . . . . . . . . .

Effects of Control Variables on Major Research Issues for

Applicants with Admissions of Employee Theft
Age of the Applicant . . . . . . . . . . .
External Economic Pressures . . . . . . . .
Type of Job Applied For . . . . . . . . . .
History of Drug Use . . . . . . . . . . .
Use of Drugs on the Job . . . . . . . . .

Frequency of Marijuana Use . . . . . . .

Chapter 5 Discussion . . . . . . . . . . . . . .

Age of the Applicant . . . . . . . . . . . .
Admissions of Narcotics Use . . . . . . . . . .
Use of Drugs on the Job . . . . . . . . . .
Frequency of Marijuana Use . . . . . . . . .
History of Drug Use . . . . . . . . . . . .
Summary for All Tests Relating to Admissions of
by Applicants . . . . . . . . . . . . . .
Type of Job Applied For . . . . . . . . . .
Meaning of Findings . . . . . . . . . . . . .
Unexplained Findings . . . . . . . . . . . . .
Recommendations for Future Research Projects on

Theft . . . . . . . . . . . . . . . . . . .

45
45
45
46
47
47

48

49
49
50
50
51
53
54
58
58
60
60
61

62

63
64
64

66

67

ix
APPENDIX Questions Used During Pre-Employment Polygraph

Examinations . . . . . . . . . . . . .

LISTOFREFERENCES..................

Table

Table

Table

Table

Table

Table

Table

Table

Table

Table

Table

4.3

LIST OF TABLES

Demographic Characteristics of Job Applicants .
Available Positions for Job Applicants. . . . .
Relationship Between Age of the Applicant and
Admissions of Employee Theft . . . . . . . .
Relationship Between Bad Debts and Admissions
of Employee Theft. . . . . . . . . . . . . .
Relationship Between Type of Job Applied For and
Admissions of Employee Theft . . . . . . . .
Relationship Between History of Drug Use and
Admissions of Employee Theft . . . . . . . .
Relationship Between Use of Drugs on the Job and
Admissions of Employee Theft . . . . . . . .
Relationship Between Frequency of Marijuana Use
and Admissions of Employee Theft . . . . .
Relationship Between Age of the Applicant and
Admissions of Employee Theft . . . . .
Relationship Betweenlmfiaof the Applicant and
Admissions of Employee Theft Controlling for
Marital Status . . . . . . . . . . . . . .
Relationship Between Use of Drugs on the Job
and Admissions of Employee Theft Controlling

for Sex . . . . . . . . . . . . . . . .

27

29

37

38

38

39

40

41

42

43

44

Table

Table

Table

Table

Table

Table

Table

Table

Table

Table

Table

4.10

4.13

4.19

xi
Relationship Between Age of the
Admissions of Employee Theft

Relationship Between Admissions

Applicant and

of Bad Debts

and Admissions of Employee Theft . . . . .

Relationship Between Type of Job Applied for

and Admissions of Employee Theft . . . . .

Relationship Between History of

Admissions of Employee Theft

Drug Use and

Relationship Between Use of Drugs on the Job

and Admissions of Employee Theft . . . . . .

Relationship Between Frequency of Marijuana Use

and Admissions of Employee Theft . . . .

Relationship Between Age of the
Admissions of Employee Theft
for Sex . . . . . . . . .

Relationship Between Age of the
Admissions of Employee Theft
Marital Status . . . . .

Relationship Between History of
Admissions of Employee Theft
Age . . . . . . . . . . . .

Relationship Between History of
Admissions of Employee Theft

Marital Status . . . . . .

Applicant and
Controlling
Applicant and
Controlling for
Drug Use and
Controlling for
Drug Use and

Controlling for

Relationship Between Use of Drugs on the Job

and Employee Theft Controlling for Sex

45

46

46

47

48

48

49

50

52

53

54

xii
Table 4.21 Relationship Between Frequency of Marijuana Use
and Admissions of Employee Theft Controlling
for Age . . . . . . . . . . . . . . . . . .
Table 4.22 Relationship Between Frequency of Marijuana Use
and Admissions of Employee Theft Controlling
for Sex . . . . . . . . . . . . . . . . . .
Table 4.23 Relationship Between Frequency of Marijuana Use
and Admissions of Employee Theft Controlling

for Marital Status . . . . . . . . . . . . .

55

56

57

Chapter 1

Introduction

Theft from the Workplace

 

Theft from the workplace is a significant problem
facing both the security and business worlds. The fact is
that virtually every business will experience some form of
theft by its employees at one time or another (Strauss,
1980). The effects of these employee thefts are damaging
to various functions of the business and among these are
loss of profits, availability of merchandise, reputation
and quite possibly the very existence of the corporation.
In a study reported in Security World (cited by Healy and
Walsh, 1981), over one quarter of the firms with more than
one thousand employees acknowledged that theft of materials,
raw products, finished products and toolsty workers was a
serious problem.

Perhaps the most detrimental aspect of employee
theft is the tremendous financial burden it places on the
organization. Exact figures can not be established, but
many estimates are available. Astor (1978) believes that
American business loses over forty four billion dollars
annually to theft from the workplace and other forms of

white collar Crime. Although Astor admits that this

2
statistic can not be confirmed, the problem is obviously
significant.

The most common method corporations use to report
total losses is to summarize all losses under the heading
of inventory shortage. Inventory shortage claims an
undetermined, but substantial percentage of the gross
volume of every manufacturer and distributor of consumer
goods in the United States (Astor, 1978). Inventory
shortage consists of the following components: employee
theft (also known as internal theft and pilferage),
external theft (shoplifting) and bookkeeping errors (Post
and Kingsbury, 1977).

Curtis (1973) estimates that employee theft is
the most critical of the elements incorporated into
inventory shortage accounting for 60%tx>75% of the total
loss figure suffered by the business. Dun and Bradstreet
reported that 7% of commercial bankruptcies were due to
internal theft during a one year period. Indeed Astor
(1978) believes that this estimate is grossly underestimated
since many firms never know the true cause of their
demise. The United States Chamber of Commerce (1974) appears
to be in agreement as it reported that over 30% of all
businesses that fail annually do so because of theft from
the workplace.

However, the amount of inventory shortage varies
from business to business. Certain types of businesses
are more susceptible to inventory shortage and internal

theft than are others. This is due in part to the

3
accessibility of merchandise and/or money to customers
and employees. The drain on gross volume in department
or discount stores appears to be between 28% and 6%,
while inventory shortage only appears to drain approximately
1%% to 3% of the gross volume in supermarket chains (Astor,
1978).

In fact, employee theft can force a business to
overproduce in order that losses be minimized. If losses
are high or are sustained over an extended period of time,
the company can eventually go bankrupt. For example, based
on retail prices in 1977, a company had to sell the following
to offset a five hundred dollar loss: a bakery had to sell
119,033 loaves of bread, a restaurant had to sell 3,788
lunches at three dollars each and a paint manufacturer had
to sell 3,339 gallons of paint. These illustrations show
how easily a loss of five hundred dollars can force a
company out of business (Dearborn, 1980).

Employees Who Steal

 

Similar to the figures relating to the costs of
employee theft, there is disagreement concerning the number
of employees who steal. Published rates of internal theft
range from a figure of 9% (U.S. News and World Report,
1977) to a disturbingly high rate of 75% (Zeitlin, 1971;
Schmidt, 1976). Lipman (1973) believes that 50% of all
employees steal from the workplace; of this percentage
25% steal important items and 8% steal in volume. Surpris-
ingly, a review of the security literature published since‘

1973 was conducted by Clark and Hollinger (1981) and a

4

general consensus was found on Lipman's figures. However,
it must be pointed out that there is some debate on the
accuracy of Lipman's rates. Some authors believe that
Lipman's figures have simply been continuously used without
citation, thus becoming figures of consensus in the
literature (Broy, 1974; U.S. Chamber of Commerce, 1974).

When studying rates of pilferage it is important
to remember that it is not uncommon for workers to steal
in groups. A number of authors have commented on this
tendency of group theft. Curtis (1973) states that the
number of collusive thefts among employees has increased
significantly over the years. Due to the increase in number
and duration of employee theft rings, Fischer (1981)
believes that the number of internal thefts and the average
amount lost to each theft from the workplace has risen
dramatically over the years.
Need For Research on Employee Theft

The 1960's produced most of the initial material
on internal theft (Seidman, 1965; Hemphill, 1969; Robin,
1969). In the years since then the literature on employee
theft has expanded vastly in both quantity and quality.
However, even with the expansion of literature there are
still gaps in the knowledge on theft from the workplace.
One of the largest gaps involves the lack of empirical
knowledge on internal theft. Indeed much of what has been
written concerning employee theft has been based on
personal observations and theories of security professionals.

Consequently, there is wide disparity among authors in a

5

variety of areas concerning employee theft. In fact
interpretations differ on such vital issues as direct or
indirect damages related to pilferage, how existing data
should be interpreted, the frequency of internal theft,
the percentages of employees involved in theft from the
workplace and what percentage of total losses suffered by
a corporation are a result of employee theft.

One of the largest gaps in the study of theft from
the workplace involves the lack of empirical knowledge.
Although some empirical studies do exist few have been
utilized to any great extent despite the fact that this
type of knowledge would be quite useful. Indeed if
empirical knowledge were utilized, greater credibility
would lend itself to the literature on employee theft,
since the findings would be based on empirical evidence
rather than theory or personal observations. The use of
empirical studies would also allow for various relationships
to be studied in detail, perhaps leading to some break-
throughs in our knowledge of theft from the workplace.

Purpose of Current Research

 

The purpose of this research project was to
explore the relationship between characteristics of job
applicants and their admissions of past employee theft.

In recent years, researchers attempting to identify common
characteristics of workers who steal from their employer
have turned to using anonymous self reports to accurately
assess the amount of theft occurring. The intent behind

this type of research is that employees who admit to

6

internal theft will have some shared (common) characteris-
tics which can be identified. Common questions used in

the self report process include job position held,
education completed, marital status, age and some general
questions on how much the employee has stolen over a period
of time. Self report research does have a major flaw in
that employees are often hesitant about answering truth-
fully because they fear reprisals from their employers.
This reluctance has hindered progress in linking admissions
of pilferage to descriptive employee characteristics.

To obtain the necessary data for this project, an
unusual two stage method of gathering information was used.
The first stage consisted of gathering information through
a self report (job application ) - this has been used with
increasing frequency in recent years. A notable example
of this approach would be the study completed by Clark and
Hollinger in 1981; however an anonymous self report was
used for this study. The second stage, a polygraph examina-
tion, actually involved using the self report of each job
applicant. This methodology has been used in only one
previous study conducted by Schmidt in 1976. With the
exception of this project and Schmidt's study, this two
stage method has yet to be used in research on theft from
the workplace.

It should be noted that this interviewer assisted
methodology does reduce some of the flaws inherent in
anonymous self report research. The interviewer assisted

self reports result in a higher response rate, higher

7
percentage of completed self reports and minimal confusion
over examination questions. The subject is also allowed
to fully explain involvement in sensitive areas. The
methodology employed for this project should result in
data equally as accurate as the data drawn from anonymous
self reports.

Yet it should be acknowledged that there is a flaw
in this project similar to anonymous self report studies.
As mentioned previously, employees are often reluctant to
answer anonymous self reports about internal theft for
fear of being identified and punished for their responses.
In this study the job applicant may be reluctant to
accurately respond to questions on employee theft activity
due to concern over being eliminated from consideration for
a job. However, this flaw should not detrimentally affect

the accuracy of the data from this project.

Chapter 2

Literature Review

This chapter will concentrate on reviewing the
literature on internal theft. Topics that will be discussed
include theories of employee theft, categories of employee
thieves, warning signs of internal theft from the workplace
and costs and frequency of internal theft. The last section
of this chapter will concentrate on the four major research
issues for this project. The research issues involve the
relationship between admissions of employee theft and the
following: type of position the applicant attempted to
secure, age of the applicant, external economic pressures
upon the applicant and the applicant‘s history of drug use.
Each of these areas has received some empirical validation
connecting them to internal theft. Some empirical validation
and some selected observations by security professionals
concerning these research issues will be presented.

There are some important differences between empiri-
cal data and professional observations that should be noted.
Personal observations made by security practitioners are
generally unsystematic and easily flawed because there are
few controls maintained in how information is gathered.

Empirical studies are based on more tightly controlled methods

9
of gathering information and conclusions are drawn from
the factual evidence produced by the study.

Theories on Employee Theft

 

The most commonly cited theory on the cause of
internal theft is that of external economic pressures.
Cressey (1953) was the initial author of this theory in his
research on embezzlement. While Cressey's research was
directed at a specific form of theft from the workplace, it
is still applicable to all forms of employee theft. Cressey
found that due to a demand for money in the worker's personal
life (external economic pressure), the employee turned to
committing theft from the workplace to fulfill this unexpected
financial need. Cressey called this external economic
pressure an unshareable problem because the worker often
felt that the problem could not be shared with fellow
employees or family members. This theory, produced by
Cressey's research, was the first applicable to internal
theft.

Another theory found in sociology literature is that
of social control. According to this theory, theft from the
workplace occurs because the broadly shared ideas and values
of the workers determine what the limits of deviant behavior
are in the workplace (Clark and Hollinger, 1981). If the
employees of an organization broadly share the idea that
internal theft is permissible then pilferage is likely to
occur. If the workers are strongly opposed to the idea of
employee theft then it is much less likely to occur in the

organization. This theory's impetus extends back to some of

10
the early studies conducted on employee theft which demon-
strated the role of group norms in theft from the workplace
(Horning, 1970; Mars, 1973, 1974).

Categories of Employees Who Steal

 

There is really no such person as the typical employee
thief. Many times the thief is the person least likely to
be suspected as a possible offender (Post, 1972). Years ago
a thief was an outlaw and a deviant and was considered
easily distinguishable from honest, good, and kindly people.
Unfortunately, times have changed drastically (Astor, 1978).

Employee thieves range from those who occasionally
pocket a small item or a little cash to those employees who
systematically steal large sums of money or large amounts of
merchandise. Some will only commit theft when security is
lax, others will steal regardless of the countermeasures in
use, while fortunately some will be honest in all
circumstances (Strauss, 1980).

Dearborn (1980) suggests that it is possible to
classify employee thieves into general categories. There are
five types of internal thieves in Dearborn's system. The
first is the jealous thief who is motivated by one of two
occurrences in the past. Either the employee has been passed
over for advancement in the organization or the employee has
been slighted in some way by the employer.

The second category is the most common of all employee
thieves under Dearborn's system and is called the contagious

thief. This employee is an opportunist, willing to cash in

11

on someone else's dishonest activities or ideas when it is
advantageous to do so.

The third type of internal thief is named the "big
shot". This employee likes to impress people outside of the
workplace by getting materials for them at a cheaper price.
This type of thief can also be motivated by the desire to
be important and usually works on his/her own, not in
collusion with others.

The fourth category of employee thief is termed the
pack rat. This employee collects things, rarely stealing
finished products. Common items stolen by this type of
thief include tools, maintenance supplies and other similar
items.

The last kind of internal thief is called the debtor
and his/her actions are the result of some seemingly insur—
mountable financial problem. To repay the financial obli-
gations incurred, the employee steals on his/her own or in
collusion with others. The debtor does not consider himself
a thief because the stealing is only to alleviate an immediate
problem.

Organizational Costs of Internal Theft

 

According to insurance company fidelity claims in
1960, dishonest workers outstole professional burglars
five to one (Curtis, 1960). Security expert Neal Holmes
estimated that dishonest employees annually cost companies
double in cash and merchandise as do all the burglaries,
auto thefts and bank robberies nationwide combined (Curtis,

1973).

12

During 1958, dishonest employees were responsible for
one half billion dollars in losses (Curtis, 1960). Twelve
years later Post (1972) reported that internal thefts cost
American business in excess of 6 billion dollars annually.
However, in 1973 Lipman reported that according to a
statement by the Insurance Information Institute, losses due
to theft from the workplace approached 10 million dollars
daily or nearly 3 billion dollars annually. In that same
year a rare agreement between authors occurred when Curtis
(1973) stated that the annual cost of employee theft was
estimated to be 3.3 billion dollars. A figure commonly cited
in security literature on the amount of internal theft is the
estimate published by the American Management Association
(1977) of 9 billion dollars. However, two years later Curtis
(1979) published an estimate of annual losses due to theft
from the workplace of 16 billion dollars.

Researchers have generally agreed that the cost of
employee theft is going upward at an alarming rate (Curtis,
1960, 1973; Post, 1972; Fischer, 1981; Healy and Walsh,
1981). Yet, the remarkable dissimilarity in estimates of
annual losses emphasizes how little is really known about
the costs of internal theft.

One consequence of theft from the workplace often
overlooked is the indirect cost. According to Curtis (1979)
there are four categories of indirect costs. The first
category is called contamination. This is when one employee
steals and others soon follow because they believe that they

can escape detection also. This is especially true for

13

employees who are frustrated or angry with the company.
The second category is the replacement cost of an employee
terminated for committing internal theft. This includes
all the costs of the recruitment process such as advertising,
interviews, and pre-employment screening tests. The next
indirect cost is the training of the new employee. This
would include meetings, paper materials and reduced produc-
tivity until properly trained. The final category is that of
loss of prestige for the company if bad publicity results.
Although it is not possible to calculate the cost of
this loss in dollars and cents, the loss suffered from this
category alone could easily be higher than the other
categories combined.

Not only can internal theft cost businesses large
sums of money, it can also cost the consumer more to buy a
product. Canadian Business (1976) reported that due to
theft from the workplace, there is an added twelve cents
per dollars for the consumer. With the estimates of theft
from the workplace consistently growing larger each year,
this cost to consumers could be considerably higher by now.

Rates of Internal Theft Based on Empirical Studies

 

Through employee interviews, Tatham (1974) discovered
that 50% of the employees in the study admitted to employee
theft. Using admissions from polygraph examinations,

Schmidt (1976) found that 76% of the workers in his study
admitted to committing theft from the workplace. In a
random sample of retail employees, Hollinger (1979) discovered

that 28% admitted to internal theft. Terris and Jones (1980)

14

obtained admissions of employee theft from 50% of the workers
in their study; the average amount of cash and/or merchandise
stolen over the length of the study (three years) was 60
dollars per employee.

The study conducted by Clark and Hollinger (1981)
is the most thorough empirical project done on theft from
the workplace and is quite similar to this project. First,
their data were also obtained through the use of self
reports. Secondly their study compared internal theft in
various types of businesses (retail stores, hospitals and
electronics manufacturing companies). Finally, Clark and
Hollinger's methodology also involved the use of confidential
face to face interviews with employees for the data gathered
through self reports.

In this landmark study, rates of pilferage among
the various types of businesses were studied. Ten percent
of retail employees, 27% of hospital workers and 14% of
electronics manufacturing employees admitted to employee
theft. Clark and Hollinger also examined how frequently
internal theft was committed in these organizations. They
found that 14% of retail, 8% of hospital and 4% of manufac-
turing employees admitted to theft from the Workplace on a
monthly or more frequent level of occurrence.

There is a disturbing complication to the figures
mentioned above. It has been suggested by several authors
that the distribution of employee theft is not normal.

These authors believe that the distribution is bi-polar.

This would suggest that a relatively few employees are

15
responsible for a significant number of the thefts occurring
in the workplace (Tatham, 1974; Hollinger, 1979). If this
is true, then just a few serious dishonest workers like the
8% Lipman suggested (see page 3) can cause a disproportionately
large problem for the organization that employs them.

Warning Signs of Employee Theft

 

Many authors have discussed possible indicators of
theft from the workplace. Some of what has been written
does not extend the knowledge on internal theft because of
the overwhelming generality of the signs said to indicate
employee theft. Other lists are more practical because they
have more specificity in terms of signs of theft from the
workplace.

Curtis (1960) believed that there were certain
warning signs indicating possible dishonesty by an employee.
His list included an employee who lived beyond his/her
means, the maladjusted employee, the heavy drinker, the drug
user, the chronic gambler, an overly attentive worker, long
term employees, the rule violator, the spendthrift, employees
with family problems, chronic liars, model executives,
employees who associate with undesirable people and teenage
workers. Unfortunately, this list of warning signals almost
assures that every worker on the payroll falls into at least
one of these categories. Therefore, a checklist of such
generalities is virtually worthless in identifying character-
istics of employee theft.

Findings like Curtis's suggest that the literature

on employee theft has been plagued by unsystematic

l6

observations and sweeping generalizations. Surprisingly,
until recent years, security and business personnel have
relied on such findings to help identify dishonest workers.
In recent years, more useful findings have been
generated regarding possible indicators of internal theft.
Goldsmith (1978) developed a list that is more specific and
appears to have more practical applications than the list
generated by Curtis. Goldsmith believes that possible indi-
cators of theft from the workplace include the following
signs: debt, domestic problems, lack of pride in work,
constant griping, wage disputes, bad morals/drug use and
living beyond the means of the employee's income. However,
upon examining the categories in Goldsmith's list, only
external economic pressures (i.e. debt, living beyond the
worker's income) (Curtis, 1960; Post, 1972) and drug use
(Terris, 1979; Fischer, 1981) have any empirical validation.

Major Research Issues

 

Jobs with a High Element of Employee Theft. Companies

 

that ignore the threat of internal theft will lose much

of their profits and could possibly be forced out of

business (Strauss, 1980). In fact, certain types of
organizations must pay very close attention to theft from the
workplace. These organizations are natural victims of
employee theft because of easy access to money and/or mer-
chandise by workers. Examples of these industries are
hospitals, drug manufacturers, assembly plants, electronic
manufacturers and all of the service organizations (Curtis,

1979).

l7

Goldsmith (1978) believes there are three principle
factors involved in the susceptibility of a work organization
to internal theft. The first is the nature of the product
manufactured or distributed. Manufacturing firms with pro-
ducts or components are examples of companies which are very
susceptible. The second factor is the number of employees.
The larger the workforce, the more inventory shrinkage the
business will suffer. The final factor is the controls
implemented by the firm. Companies that have poor controls
for shipping, receiving or paperwork will suffer greater
losses than those firms with tight controls on these problem
areas.

' Certain jobs are also natural Opportunities for
employee theft. These include jobs where money and/or
merchandise is handled regularly by workers (Curtis, 1979).
Examples of these jobs would be cashiers, dock personnel,
and assembly line workers.

Although the relationships mentioned in the preceding
paragraph seem logical and quite defensible, they are still
based on personal observations. Some empirical evidence is
needed to improve the credibility of these relationships.

A Security World study (cited in Healy and Walsh,
1981) examined the relationship between the type of job the
applicant was attempting to secure and whether the applicant
had favorable or unfavorable background data. The results
showed that management applicants had the highest percentage
of unfavorable data (18.9%), followed by shop and office

applicants (15.5%) and scientific and technical applicants

18
(9.6%). Based on this study, it appears that the type of
job an applicant is applying for is related to having
unfavorable background data for that type of job applicant.

Effect of Worker's Age on Internal Theft. For a

 

number of years security professionals have expressed the
belief that the age of the employee is associated with
theft from the workplace. Specifically, authors have
hypothesized that younger workers are overinvolved in
employee theft when compared to other age groups of workers
(Robin, 1969; Franklin, 1975). This belief has concentrated
on the honesty and integrity of young employees in an
organization. This promotes the argument that younger
employees are not as honest nor have as much integrity as
do older workers. Yet, there has never been an accepted
explanation for this, although Merriam (1977) described it
as an "epidemic of moral laxity among young workers".

Once again the description of a relationship between
theft from the workplace and a variable suffered because it
was based on unsystematic observations, not empirical
evidence. However, Clark and Hollinger (1981) did find
supporting empirical evidence that this relationship did
exist. They found that younger workers were more involved
in employee theft than other age groups. These authors also
suggested a plausible explanation as to why this relationship
exists. They believe that younger workers are less responsive
to negative sanctions since they often have no dependents,
senority (loss of benefits) or career aspirations with the

organization.

19

Relationship Between External Economic Pressures
and Pilferage. In addition to type of job applied for and
age, there are other variables that have been hypothesized
as having some influence on internal theft. Among these is
a variable referred to as external economic pressures.

Seidman (1965) had two phrases for the causes of
employee theft. The first was "gin, girls, and gambling",
the second was "babes, booze, and bookies". Both of Seidman's
phrases concern the employee yielding to some type of
external economic pressure.

Curtis (1960) also shared this belief that an employee
steals due to some emergency need for money. He also
suggested that once this occurs, the workers finds it easier
to steal again.

The employee who needs to steal for financial reasons
is faced with one other problem. Fences usually pay approxi-
mately twenty percent or less of actual value forcing internal
thieves to steal vast amounts of merchandise to alleviate
their financial problems (Lipman, 1973). Of course this is
only applicable to pilferage of merchandise, not money.

The first empirical evidence that external economic
pressures did indeed affect internal theft was found by
Cressey (1953) in his research on embezzlement. His research
showed that employees faced with an unshareable problem
turned to embezzling from the organization to alleviate this
situation. However, it must be pointed out that this research
only applies to theft of money from the workplace since

embezzling only involves money.

20

In addition to Cressey's study, empirical evidence
relating external economic pressures to employee theft has
been generated through other studies as well. For example,
the Chicago Crime Commission found four major factors
behind theft from the workplace: gambling, extravagant
living standards, undesirable associates and an inadequate
income (Curtis, 1960). A National Foreman's Institute study
found that the principle factors behind internal theft were
related to external economic pressures. These factors were:
living beyond the means of the salary, gambling, high living
and questionable companions, and an extended illness of the
principle wage earner of a family (Post, 1972). Both of
these studies empirically support the claim that external
economic pressures are related to employee theft.

The Relationship Between Drug Use and Internal Theft.

 

The final major research issue that will be studied in this
research project will be the relationship between drugs use
and theft from the workplace. The principle factors

behind this association are reported to be the high costs
of the drugs and/or the drug habit and the reduction of
inhibitions resulting from use of the drug leading to theft
from the workplace.

A good example of how drugs can influence employees
to steal was recently reported in U.S. News and World Report
(1983). The article stated that an electrical contracting
firm recently discovered that dishonest employees had
stolen approximately fifty thousand dollars worth of their

goods and resold them to help finance their drugs habits.

21
The conclusion of the article was that the drug habits of
workers and internal theft were definitely linked.

Another good example of the expense behind a drug
habit is the annual thirty-five thousand dollar habit of a
heroin addict (Fischer, 1981). An addict would be forced to
steal five times the actual amount of the drug habit in
merchandise due to the reduced value of the goods on the
street (Post, 1972; Fischer, 1981).

Extensive drug use has been empirically associated
with theft from the workplace. Terris (1979) discovered
that employee thieves have tendencies toward areas like
alcohol and drug abuse. In 1980, Terris and Jones found a
strong predictor of theft from the workplace to be past drug
use (other than alcohol), however this finding only applies
to younger not older workers.

In their study, Clark and Hollinger (1981) investigated
how many employees reported to work under the influence of
drugs. They found that 3% of the hospital, 8% of the retail
and 13% of the manufacturing employees admitted coming to
work within the past year while under the influence of
alcohol or drugs. This finding along with the empirical
evidence found in the above mentioned studies details what
a dangerous relationship drug use has with theft from the
workplace.

Summary

The number of empirical studies conducted on internal

theft has risen sharply over the last several years. The

conclusions drawn from these projects have improved the

22
credibility of the literature on employee theft because
these studies involve systematic observations with good
methodological controls. However, even with this improvement
there are still gaps in the knowledge of theft from the
workplace. The results of the empirical studies still show
inconsistencies in the costs, frequency and number of workers
involved in pilferage. It must also be remembered that some
variables are beginning to receive more consistent support
from the empirical studies with regard to their association
with internal theft.

Most researchers agree, regardless of empirical
study or personal observation, that no one really knows the
extent of damages caused directly or indirectly by employee
theft (Clark and Hollinger, 1981). Many researchers agree
that similar to other forms of crime, figures found in the
security literature are probably grossly understated. Some
authors believe that the problem of internal theft is so
drastic, that the number of workers involved is irrelevant
(Astor, 1978). Generally it is agreed that the percentages
of employees and the losses from these acts are on the
upswing (Fischer, 1981; Healy and Walsh, 1981).

One piece of important information that has been
suggested by several authors is that theft from the workplace
tends to have a bi-polar distribution. This suggests that
a relatively few workers are responsible for a significant
amount of pilferage (Tatham, 1974; Hollinger, 1979) .

Some authors have stated that theft from the work-

place and related internal problems are the greatest

23

contributors to inventory shortage in all business (Newby,
1980; Curtis, 1973). Apparently employee theft accounts for
the majority of losses suffered by industry and business,
and the problem seems to be rapidly worsening (Terris and
Jones, 1980). If research could identify those workers who
are responsible for the significant percentage of inventory
shortage losses, then business organizations could reduce

their losses significantly.

Chapter 3

Methodology

In this chapter the methodology employed for this
research project will be discussed. Among the various items
that will be detailed in this chapter are the stages of a
pre-employment polygraph examination, characteristics of the
sample, listings of businesses and jobs involved in this
project and operational definitions for selected variables.

The final section of this chapter will outline the
major research issues of this project. A brief synopsis
of what previous empirical studies have found on each of
these items will be included.

Source of Data

 

The data base for this project was drawn from inter-
viewer assisted self-reports on employee misconduct made by
applicants during pre-employment interviews. These inter-
views were conducted by a polygraph consulting firm that
specializes in administering pre-employment polygraph-based
interviews. Each applicant was requested to take a pre-
employment polygraph examination. The applicant was referred
to the consulting firm by the potential employer.

The self-report data generated from the pre-employment
interview (see Appendix for complete list of areas in
Which information was gathered) are unrelated to the controversy

24

 

25

about the accuracy of the polygraph. That is, the admissions
of the applicants were made separate from the actual use of
the polygraph instrument. In order to better understand this
process, it will be helpful to explain what is involved in
a standard pre-employment polygraph examination.

A standard pre-employment polygraph examination
consists of questions in the following areas: theft of
money and merchandise from previous employers, history of
past criminal activities including convictions and crimes
that went undetected, receiving and selling stolen merchan-
dise, history of drug use and falsification of the job
application (Phannestill, 1984). Applicants admissions in
these areas were generated from one of the stages of the
pre-employment polygraph examination. In the next section,
each of the stages will be discussed explaining the purpose
of the stage in the standard pre-employment polygraph
examination.

The Three Stages of the Polygraph Examination Process

 

Stage 1 The Pre-Test Interview. The pre-test

 

interview is the first stage in the pre-employment polygraph
examination. This consists of a discussion between the
polygraph examiner and the job applicant regarding the
questions to be asked in the upcoming examination. The pre-
test interview serves several purposes. It allows the
applicant to relax and better understand the process that is
about to occur. Next, it allows the applicant to realize
that there will be no surprise questions since the examiner

and the applicant discuss each question beforehand. It also

26
allows the applicant to clarify any illegal activity of
importance to the employer prior to actual polygraph testing
(e.g. previous employee theft, use of narcotics, etc.).
Finally the questions in the pre-test interview generate a
checklist of issues for the examiner to verify.

For the purposes of this research project, the
checklist of admissions served as self report data on each
job applicant. This checklist also served as a self report
on certain of the applicants job qualifications and
demographic characteristics. It is this information that
provides background data on the applicant.

Stage 2 Polygraph Testing. After the pre—test

 

interview is concluded and the applicant clearly understands
in what areas he/she is being questioned, polygraph testing
is initiated by the examiner. During this stage of the
process the polygraph instrument is in operation. At this
time the examiner once again questions the applicant on the
standardized areas discussed in the pre-test interview. In
most instances no new self report information is generated
from this stage of the examination process. For this project,
areas in which the applicant's admissions were examined were:
financial situation of the applicant (bad debts), history of
drug use, and amounts of thefts both on and off the job from
former employers.

Stage 3 Post Test. The final stage of the standard

 

pre-employment polygraph examination is called the post test
interview. During this stage it is standard practice for the

examiner to advise the subject that the polygraph testing

27

phase is over and to announce the results of the examination.
If the examiner believed that the applicant was giving incom-
plete information on a subject area, further information was
requested. If the applicant gave further information on a
subject area, new self-report data was generated. It should
be clearly understood that the final recorded admission on

a subject area, whether derived during the pre or post test
interview, served as the self-report data analyzed for this
project.

It should be noted that these final admissions were
not independently verified. This problem is inherent in all
self-report research. Therefore, the validity of this data
should be viewed with the same reservations as other self-
report research. The methodology used in this project is
not necessarily better than methodologies used in other
empirical studies. However, because it is relatively unique
to empirical research previously conducted on employee theft,
theft from the workplace will be examined in a manner
different than before. It is hoped this methodology will
result in new and useful information on internal theft.

Characteristics of the Sample

 

The sample for this project was the 656 consecutive
applicants who, as a result of a job application, made
contact with the consulting firm and began the polygraph
examination process during the year 1979. However, complete
data could be obtained from only 599 of these applicants;
therefore they served as the actual sample for this project.

It is unknown how many applicants were initially referred to

28

the consulting firm but never made contact. Since it seems
unlikely that the prOportion of these "no shows" changes
dramatically from year to year, the sample for this project
is probably representative of job applicants in other years.

Of the 599 applicants in the sample, 376 (63%) were
male and 223 (37%) were female as shown in Table 3.1. The
range of ages for the applicants was from 16 to 65 with the
mean age being 26, the median age being 23 and the standard
deviation equaling 8.9 (See Table 3.1.). The education of
these applicants ranged from 8 to 18 years, the mean being
13, the median being 12 and the standard deviation equaling
1.9 (See Table 3.1.). Of the 599 applicants, 234 (39%) were
married while 365 (61%) were single as displayed in Table

3.1.

27
Table 3.1 Demographic Characteristics of Job Applicants

Sex of Job Applicants

 

 

Sex N Percentage
Male 376 63
Female 223 37

Ages of Job Applicants

 

range - 16-65
mean - 26 years
median - 23 years
5 - 8.9

Education of Job Applicants

 

range - 8-18 years
mean - 13 years
median - 12 years

5 - 1.9

Marital Status of Job Applicants

Status N Percentage

 

Married 234 39

Single 365 61

28
Potential Jobs and Types of Businesses Involved in This Study

Numerous types of businesses referred their potential
hirees to the polygraph consulting firm during the year this
project was conducted. Businesses that made use of the
consulting firm were freight companies, storage companies,
exterminators, armored car companies, police departments,
shoe companies, drug manufacturers, vending companies, hard-
ware stores, book companies, restaurants, jewelry companies,
fabric companies, department stores, electronics companies
and floor covering companies.

The potential jobs for the 599 applicants in this
study were diverse. Available positions included truck
drivers, pharmacists, stockboys, exterminators, drug store
cashiers, armored car drivers, guards, management sales
trainees, service drivers, bookstore cashiers, department
store cashiers, money counters, civilian police dispatchers
and clerical workers.

Table 3.2 shows the frequency distribution of the
positions that were available to job applicants involved in

this study.

29

 

Table 3.2 Available Positions for Job Applicants
Position N Percentage
Truck Drivers 32 5
Pharmacists 35 6
Stockboys 55 9
Exterminators 116 19
Drug Store Cashiers 95 16
Armored Car Drivers 5 1
Guards 43 7
Management Sales Trainees 78 13
Service Drivers 20 3
Bookstore Cashiers 28 5
Department Store Cashiers 69 12
Money Counters 1 (.2)
Civilian Police Dispatchers 3 (.5)
Clerical Workers l9 3

30

Operational Definitions

 

Research projects often use the same type of variables,
but do not define variables in exactly the same way. There-
fore, each variable in a research project needs to be given
an operational definition. An operational definition is the
concrete and specific definition of something in terms of the
Operations by which operations are to be categorized (Babbie,
1979).

Marital status of the applicant was operationalized
as either married or single according to information provided
by each applicant. Age of the applicant was operationally
defined as (a) ages 24 or less: younger, and (b) ages 25 or
over: gldgr.

The range of narcotics that the applicant was
questioned about included the following: marijuana, sniffing
glue, THC, hash, barbituates, opium, cocaine, heroin and
stimulants. History of drug use was operationalized by
placing drug use admissions into one of the following
categories: (a) no admission of any drug: 2922, (b)

admission of marijuana use only: marijuana only, and (c)

 

admission of using any other drug: "hard" drugs.

 

Frequency of marijuana use was also studied separately
from admissions of using other drugs. Marijuana use
admissions were operationalized into one of the following
categories: (a) no use: 2223, (b) less than five times

monthly: occasionally, and (c) fives times or more monthly:

 

frequently.

 

31
The type of job applied for was one of fourteen
positions available as shown in Table 3.2. These jobs were
categorized in the following manner: (a) management sales

trainees: management applicants, (b) exterminators and

 

pharmacists: scientific and technical applicants, and (c)

 

truck drivers, stockboys, drug store cashiers, armored car
drivers, guards, service drivers, book store cashiers,
department store cashiers, money counters, civilian police

dispatchers and clerical workers: shop and office applicants.

 

Dollar Amount vs. Frequency of Employee Theft Issue

 

For this project a decision had to be made on how
seriousness of internal theft would be determined. Two
variables were available for possible use; either total dollar
amount or frequency of theft. Indeed frequency of theft
might be an important variable, but the self report admissions
only dealt with whether employee theft was committed as a
juvenile, adult or both. This information was not considered
especially meaningful nor would it further existing knowledge
on theft from the workplace. Also, various studies have used
frequency of theft to study pilferage (Clark and Hollinger,
1981). However, no empirical study has examined internal
theft by using admissions of dollar amount. Therefore it
was decided that studying pilferage by using total dollar
amount would yield useful new information on employee theft.
It is for this reason total dollar amount was chosen as the
indicator for seriousness of theft from the workplace.

A problem that has continually plagued security

literature is a consistent definition of theft from the

32

workplace. There has been virtually no agreement among
researchers on a single definition of employee theft, although
some are more commonly cited. The definition employed by
Hollinger and Clark in their landmark 1981 study is one such
definition. It states that "employee theft consists of the
unauthorized taking, control or transfer of money and/or
property of the formal work organization by an employee during
the course of occupational activity" (Merriam, 1977). However,
this definition was too cumbersome and complex for this
research project. Therefore, the chosen operational defini-
tion for internal theft was the actual dollar amount the
applicant admitted he/she had stolen from previous employers
in either merchandise or money in one of the following
categories: (a) if an applicant had no admission for either
internal theft of money or merchandise: 2923, (b) if an
applicant had a minor admission (50 dollars or less) in money
or in merchandise, but no admission in the other category;
or minor admissions in both money and merchandise: nggp,
and (c) if an applicant had a major admission (over 50
dollars) in either money or merchandise: mgjgg.

These categories will remain consistent throughout
all the upcoming tests on the major research issues. The
dependent variable for all tests will be the total amount
of employee theft and its level of measurement will be
ordinal.

Major Research Issues

 

Since there have been relatively few empirical studies

conducted on job applicants and their admissions of internal

33
theft, this research will be exploratory in nature. The
independent variables for the upcoming tests will be the
variables previously mentioned that have been found to be
associated with admissions of employee theft.

All tests conducted on these variables will involve
chi-square tests. Chi-square tests are tests of statistical
significance that determine if a relationship exists between
two variables. With these tests the probability that the
observed relationship occurred by chance can be determined.
It is commonly accepted in social science to accept as
statistically significant those relationships which have a
probability of occurring by chance five percent of the time
or less (critical value of .05).

Measures of association will also accompany tables
where statistical significance is found. Measures of asso-
ciation are used to indicate how strongly two variables are
related to each other. The choice of a measure of association
depends on the level of measurement for those variables
involved in the relationship being tested. Gamma is considered
an appropriate measure of association for variables that are
rank ordered and since all variables used in this project are
rank ordered (ordinal), gamma will be the meaSure of associ-
ation used.

Research Issue #1. The first major research issue

 

involves the relationship between external economic pressures
on the applicant and admissions of employee theft. It has
been shown previously that applicants who have bed debts

have more significant admission of internal theft than those

34
applicants who do not admit having bad debts (Cressey, 1953;
Curtis, 1960; Post, 1972). The level of measurement for bad
debts will be ordinal.

Research Issue #2. Exploring the relationship between

 

age of the applicant and admissions of pilferage will consti-
tute the second major research issue. It has been established
previously that younger employees have more significant
admissions of internal theft than older employees (Clark and
Hollinger, 1981). The level of measurement for age of the
applicant will be ordinal.

Research Issue #3. The third major research issue

 

describes the relationship between the applicants' admitted
history of drug use and admissions of theft from the work-
place. Previous studies have indicated that applicants who
admit to extensive drug use are more likely to have signifi-
cant admissions of employee theft than those applicants without
an admitted history of extensive drug use (Terris, 1979;

Terris and Jones, 1980). Three separate tests will be used to
investigate this research issue.

The initial test will use frequency of marijuana use
as an indicator of extensive drug use. Those applicants who
admitted using marijuana frequently will be considered exten-
sive drug users. The level of measurement for frequency of
marijuana use is ordinal.

For the second test, admissions of all drugs the
applicants were initially questioned about during polygraph
testing will be examined. Due to the widespread use of

marijuana, it was decided to test its use separately from

35
the nine "hard" drugs. The level of measurement for history
of drug use will be ordinal.
In the final test, use of drugs while on the job and
admissions of employee theft will be studied. The level of
measurement for using drugs on the job will be ordinal.

Research Issue #4. The final major research issue

 

will explore the relationship between the type of job

applied for and admissions of theft from the workplace. A
study reported by Security World established that applicants
who apply for management positions will have more significant
admissions than will shop and office or scientific and
technical applicants (cited in Healy and Walsh, 1981). The
level of measurement for type of job applied for will be
ordinal.

Control Variables

 

Since there is so little empirical evidence on
internal theft, three control variables that might be related
to internal theft admissions will be analyzed. A control
variable is a variable held constant in an attempt to further
clarify the relationship between two variables (Babbie, 1979).
Chi-square tests will be utilized with certain variables
being controlled to discover the influence of these variables
on employee theft admissions. Variables that will serve as
controls include sex, age and marital status of the

applicant.

Chapter 4

Results

There are two sections in this chapter. The first
involves the testing of variables in bivariate relationships
considered major research issues; these are: age of the
applicant, admissions of bad debts, admissions of drug use
and type of job the applicant was attempting to secure as
they relate to employee theft. Next, these same issues are
further examined by use of three control variables, sex, age
and marital status of the applicant.

Section two will show data only from those applicants
who made admissions of theft from the workplace. Once again
control variables will be utilized after bivariate relation-
ships are tested.

Section 1 Admissions From All Applicants

 

Age of the Applicant. Table 4.1 displays the rela-

 

tionship between age of the applicant and admissions of
internal theft. The analysis of data showed that younger
applicants admitted more involvement in minor employee theft
(40%) than older applicants (31%), but older applicants had
more major admission of pilferage 22% to 15%. These differ-
ences in the admissions between the age groups were found to
be statistically significant, but the value of gamma showed

36

37
that the relationship was very weak (x2=7.56, df-2, p=.02,

gamma =.04).

Table 4.1 Relationship Between Age of the Applicant and

Admissions of Employee Theft

 

 

Employee Theft Age of the Applicant
Admissions Younger Qidg;
None 157 121
Minor 136 78
Major 51 56

x2=7.56, 2df, p=.02, gamma=.04

External Economic Pressures. The analysis of data
between admissions of bad debts and admissions of employee
theft is displayed in Table 4.2. The differences between
admissions of applicants with admitted bad debts compared
to those who did not admit bad debts were not found to be
statistically significant. It should be noted that only
3% of the applicants admitted to having bad debts (x2: 4.0,

df—2, p=.13).

38
Table 4.2 Relationship Between Bad Debts and

Admissions of Employee Theft

 

 

Employee Theft Bad Debts
Admissions N9 Neg
None 273 5
Minor 206 8
Major 101 6
2

x =4.oo, 2df, p=.13

Type of Job Applied For. The distribution of data
pertaining to the type of job applied for by admissions of
theft from the workplace is shown in Table 4.3. The differ-
ences in admissions among management, scientific and technical,
and shop and office applicants were not found to be statis-

tically significant (x2=3.46, df—4, p=.48).

Table 4.3 Relationship Between Type of Job Applied For
and Admissions of Employee Theft
Employee Theft Type of Job Applied For

Admissions Management Scientific/Technical Shop/Office

 

None 32 74 172

Minor 32 46 136

Major 14 31 62
2

x = 3.46, 4df, p=.48

History of Drug Use. Table 4.4 displays the distri-
bution of data between the applicants' admitted history of
drug use and admissions of theft from the workplace. The

data shows that as admissions of drug use increase so do the

39
percentages involving severity of pilferage admissions. Of
the applicants who did not have any admissions of drug use,
58% had no admissions of employee theft. Forty four percent
of the applicants who admitted using marijuana only, had
minor admissions of internal theft. Thirty one percent of
the applicants who admitted using "hard" drugs had major
admissions of theft from the workplace. These differences
were found to be statistically significant and the value of
gamma showed that the relationship was of moderate strength

(x2=36.17, df-4, p=.00, gamma=.3l).

Table 4.4 Relationship Between History of Drug Use and

Admissions of Employee Theft

 

 

 

 

Employee Theft History of Drug Use
Admissions nge Marijuana Only "Hard" Drugs
None 154 87 -37
Minor 76 94 44
Major 37 34 36
2

x = 36.17, 4df, p=.00, gamma=.31

Use of Drugs on the Job. Analysis of the data rele—

 

vant to admissions of using drugs on the job by admissions
of pilferage showed that a statistically significant rela-
tionship existed. The data in Table 4.5 reveal that appli—
cants who admitted using drugs on the job had a higher pro-
portion of minor (37%) and major (39%) admissions of
employee theft than applicants who did not admit using drugs

on the job, 36% and 16% respectively. The value of gamma

40
showed that the relationship was of moderate strength (x2:

18.61, df-2, p=.00, gamma=.46).

Table 4.5 Relationship Between Use of Drugs on the Job and

Admissions of Employee Theft

 

 

Employee Theft Use of Drugs on the Job
Admissions N9 Neg
None 266 12
Minor 196 18
Major 88 19
2

x =18.61, 2df, p=.00, gamma=.46

Frequency of Marijuana Use. The analysis of data

 

between admissions of marijuana use and admissions of internal
theft is displayed in Table 4.6 and shows that as frequency
of marijuana use increases so do admissions of theft from
the workplace. Of the applicants who did not admit using
marijuana, 57% had no admissions of theft from the workplace.
Forty nine percent of the applicants who admitted using
marijuana occasionally had minor admissions of internal
theft. Twenty five percent of the applicants who admitted
using marijuana frequently had major admissions of pilferage.
These differences were found to be statistically significant
and gamma showed that the relationship was of moderate

strength (x2=37.32, df-4, p=.00, gamma=.31).

41
Table 4.6 Relationship Between Frequency of Marijuana Use

and Admissions of Employee Theft

 

 

 

 

Employee Theft Frequency of Marijuana Use
Admissions N939 Occasionally Frequently
None 158 32 88
Minor 77 36 101
Major 40 5 62

x2=37.32, 4df, p=.00, gamma=.31

Effect of Control Variables on Major Research Issues — All

 

Applicants

 

Age of the Applicant. The relationship between the

 

data on the age of the applicant by admissions of theft from
the workplace controlling for the sex of the applicant is
shown in Table 4.7. In the case of females no significant
effect was found as shown in the table. However, among males,
younger applicants were proportionately more involved in
minor admissions of internal theft than older applicants -

40% to 28%, but older applicants admitted more involvement

in major employee theft 25% to 19%. These differences were
statistically significant, but the value of conditional

gamma showed that the relationship was very weak (corrected

x2=6.07, df-2, p=.05, conditional gamma=-.02).

42
Table 4.7 Relationship Between Age of the Applicant

and Admissions of Employee Theft Controlling for Sex

 

 

Employee Theft Age of the Applicant
Admissions Younger QlSEE
N213
None 75 91
Minor 72 54
Major 35 49
Female
None 82 30
Minor 64 24
Major 16 7

a=corrected x2=6.07, 2df, p=.05, conditional gamma=-.02

b=corrected x2=.13, 2df, p=.94, conditional gamma=.04

The data distribution between age of the applicant
and admissions of theft from the workplace when controlling
the marital status of the applicant is shown in Table 4.8.

In the case of married applicants no statistically significant
effect was found. However, among applicants who were single,
younger applicants were involved in minor admissions of
pilferage more often than older applicants - 39% to 32%, but
older applicants had more major admissions of employee theft
(25%) than younger applicants (14%). These differences were
statistically significant, but conditional gamma revealed
that the relationship was weak (corrected x2=6.31, df-2,

p=.04, conditional gamma=.14).i

43
Table 4.8 Relationship Between Age of the Applicant and

Admissions of Employee Theft Controlling for Marital Status

 

 

Employee Theft Age of the Applicant
Admissions Younger Niger
Single
None 126 42
Minor 105 31
Major 37 24
Married
None 31 79
Minor 31 47
Major 14 32

a=corrected x2=6.31, 2df, p=.04, conditional gamma=.14

b=corrected x2=2.89, 2df, p=.24, conditional gamma=-.10

External Economic Pressures. It was not possible to

 

conduct meaningful chi-square tests on this variable utilizing
control variables. This was due to the small number of
applicants who admitted having bad debts (N=l9).

Type of Job Applied For. Using control variables to

 

further examine the relationship between the type of job an
applicant was attempting to secure and admissions of internal
theft did not provide any significant relationship. None of
the variables implemented in these tests showed any statis-
tically significant values.

Applicants Admitted Use of Narcotics. None of the

 

tests displaying the effect of control variables on frequency

of marijuana use, use of drugs on the job and history of

44
drug use showed any statistically significant effect with
the exception of controlling the sex of the applicant while
examining use of drugs on the job. In the case of females
no significant effect was found. Table 4.9 shows that among
males, those that did not admit using drugs on the job were
more likelytx>have no admissions of pilferage (46%) than
those who admitted using drugs at work (24%). However, those
that admitted using drugs on the job were overinvolved in
major admissions of internal theft (46%) compared to those
who did not admit to drug use (20%). These differences were
found to be statistically significant and the value of gamma
signifies that the relationship is moderate in strength

(corrected x2=14.06, df—2, p=.00, conditional gamma=.46).

Table 4.9 Relationship Between Use of Drugs on the Job and

Admissions of Employee Theft Controlling for Sex

 

 

Employee Theft Use of Drugs on the Job
Admissions N9 ng
ante.

None 157 9
Minor 115 11
Major 67 17
Female
None 109 3
Minor 81 7
Major 21 2

a=corrected x2=l4.06, 2df, p=.00, conditional gamma=.46

b=corrected x2=3.25, 2df, p=.20, conditional gamma=.43

45
Section 2 Applicants with Admissions of Employee Theft
It should be noted for this section that applicants
who did not admit using drugs were dropped from chi-square
tests involving history of drug use and frequency of mari-
juana use. This allowed for a clearer picture of the effect
of admitted drug use on admissions of pilferage.

Age of the Applicant. A relationship exists between

 

the ages of applicants who had admissions of theft from the
workplace and the severity of their admissions as shown in
Table 4.10. Younger applicants were proportionately more
involved with minor admissions of employee theft (73%) versus
older applicants (58%). Older applicants were more involved
in major admissions of internal theft (42%) than younger
applicants (27%). These differences were statistically
significant and gamma showed that the relationship was
moderate in strength (corrected x2=6.77, df—l, p=.01, gamma=

.31).

Table 4.10 Relationship Between Age of the Applicant and

Admissions of Employee Theft

 

 

Employee Theft Age of the Applicant
Admissions Younger 9i§§£

Minor 136 78

Major 51 56

corrected x2=6.77, ldf, p=.01, gamma=.3l

External Economic Pressure. The analysis of data

 

between admissions of bad debts and the severity of employee

46
theft admissions is displayed in Table 4.11. Only 4% of
the applicants who admitted to internal theft also had
admissions of bad debts. The relationship was not found to
2

be statistically significant (corrected x =.23, df-l, p=

.63).

Table 4.11 Relationship Between Admissions of Bad Debts

and Admissions of Employee Theft

 

 

Employee Theft Bad Debts
Admissions Np Egg
Minor 206 8
Major 101 6
2

corrected x =.23, 1df, p=.63

Type of Job Applied For. The distribution of data

 

that pertained to the type of job applied for by the extent
of admissions of theft from the workplace is represented in
Table 4.12. The differences were not found to be statistically

significant (x2=2.20, df—2, p=.33).

Table 4.12 Relationship Between Type of Job Applied For and
Admissions of Employee Theft
Employee Theft Type of Job Applied For

Admissions Management Scientific/Technical Shop/Office

 

Minor 32 46 136
Major 14 31 62

x2=2.20, 2df, p=.33

47

History of Drug Use. The relationship between the

 

applicants' admitted history of drug use and admitted amounts

of theft from the workplace are shown in Table 4.13. It

reveals that 73% of the applicants who admitted using only
marijuana had minor admissions of internal theft while 45% of
the applicants who admitted using "hard" drugs had major
admissions of employee theft. These differences were found

to be statistically significant and the value of gamma displayed
that the strength of this relationship was moderate (cor-

rected x2=6.70, df-l, p=.01, gamma=.39).

Table 4.13 Relationship Between History of Drug Use and

Admissions of Employee Theft

 

 

 

 

Employee Theft Historygof Drug Use
Admissions Marijuana Only; "Hard" Drugs
Minor 94 44
Major 34 36

corrected x2=6.70, 1df, p=.01, gamma=.39

Use of Drugs on the Job. Analysis of the data

 

relevant to admissions of using drugs on the job by the
severity of pilferage admissions showed that a statistically
significant relationship did exist. Table 4.14 reveals that
69% of the applicants who did not admit using drugs on the
job had minor admissions of internal theft while 51% of

the applicants who did admit using drugs on the job had
major admissions of employee theft. The value of gamma
revealed that this relationship was of moderate strength

(corrected x2=5.23, df-l, p=.02, gamma=.40).

48
Table 4.14 Relationship Between Use of Drugs on the Job

and Admissions of Employee Theft

 

 

Employee Theft Use of Drugg on the Job
Admissions Ng ng
Minor 196 18
Major 88 19

x2=5.23, 1df, p=.02, gamma=.40

Frequency of Marijuana Use. The analysis of data
between admissions of marijuana use and the extent of internal
theft admissions is displayed in Table 4.15. It shows that
as frequency of marijuana use increases so do admissions of
theft from the workplace. Applicants who admitted using
marijuana occasionally had moreininor admissions of pilferage
(88%) than applicants who admitted using marijuana frequently
(62%). However, 38% of the admitted frequent users of
marijuana had major admissions of employee theft compared to
only 12% of the occasional users. These differences were
found to be statistically significant and gamma revealed
that the relationship between the variables was strong

(corrected x2=8.78, df—l, p=.00, gamma=.63).

Table 4.15 Relationship Between Frequency of Marijuana Use

and Admissions of Employee Theft

 

 

 

 

Employee Theft Frequency of Marijuana Use
Admissions Occasionally Frequently
Minor 36 101
Major 5 62

corrected 2=8.78, 1df, p=.00, gamma=.63

49

Effects of Control Variables on Major Research Issues for

 

Applicants with Admissions of Employee Theft

 

Age of the Applicant. Analysis of the relationship

 

for age of the applicant by their admitted amounts of internal
theft with control variables are shown in Tables 4.16 and
4.17. No significant effect could be found when controlling
for gender in the case of females as shown in Table 4.16.
However, among males, it was discovered that younger appli-
cants had more minor admissions of pilferage (67%) but that
older applicants had more major admissions of theft from the
workplace - 48% to 33%. These differences were statistically
significant and the value of conditional gamma displayed

that the relationship was of moderate strength (corrected

x2=4.23, df-l, p=.04, conditional gamma=.30).

Table 4.16 Relationship Between Age of the Applicant and

Admissions of Employee Theft Controlling for Sex

 

 

 

Employee Theft Age of the Applicant
Admissions Younger giggg
Male
Minor 72 54
Major 35 49
Female
Minor 64 24
Major 16 7

a=corrected x2=4.23, 1df, p=.04, conditional gamma=.30

b=corrected x2=.00, 1df, p=.97, conditional gamma=.08

50

The data distribution between age of the applicant
and severity of admissions of theft from the workplace when
controlling the marital status is represented in Table 4.17.
In the case of married applicant no significant effect was
found. Among applicants that were single, younger applicants
had more admissions of minor employee theft (74%) and older
applicants had more admissions of internal theft 44%-26%.
These differences were found to be statistically significant
and conditional gamma showed a moderate relationship

(corrected x2=4.94, df-l, p=.03, conditional gamma=.37).

Table 4.17 Relationship Between Age of the Applicant and

Admissions of Employee Theft Controlling for Marital Status

 

 

Employee Theft Age of the Applicant
Admissions Younger QlQEE

Single

Minor 105 31

Major 37 24
Married

Minor 31 47

Major 14 32

a=corrected x2=4.94, 1df, p=.03, conditional gamma=.37

b=corrected x2=.72, 1df, p=.40, conditional gamma=.20

External Economic Pressures. See discussion on

 

page 43.

Type of Job Applied For. Once again using control

 

variables to test the relationship between the type of job

51
the applicant was attempting to secure and admissions of
internal theft did not provide any significant result. None
of the control variables used to test this research issue
exhibited any statistically significant influence.

History of Drug Use. With the exception of control-

 

ling the gender of the applicant, all tests involving control
variables were found to be statistically significant on the
data distributions for history of drug use by extent of
employee theft admissions. In the case of younger applicants
no significant effect was found. As shown in Table 4.18,

the data do reveal that older applicants who admitted using
only marijuana had more minor admissions of internal theft
(72%) and older applicants who admitted using "hard" drugs
were more likely to have major admissions of pilferage (68%)
than those who admitted using only marijuana (28%). These
differences were found to be statistically significant and
the value of conditional gamma revealed a strong relationship
between the variables (corrected x2=8.92, df—l, p=.00,

conditional gamma=.69).

52
Table 4.18 Relationship Between History of Drug Use and

Admissions of Employee Theft Controlling for Age

 

 

 

 

Employee Theft History of DruggUse
Admissions Marijuana Only "Hard" Drugg

older

Minor 33 8

Major 13 17
Younger

Minor 61 36

Major 21 19

a=corrected x2=8.92, 1df, p=.00, conditional gamma=.69

b=corrected x2=.88, 1df, p=.35, conditional gamma=.21

As can be seen in Table 4.19, no significant effect
was found for married applicants. However, single applicants
who admitted using marijuana only had more minor admissions
of employee theft (74%) than did applicants who admitted
using "hard" drugs (56%), but single applicants who admitted
using "hard" drugs had more major admissions of pilferage —
44% to 26%. These differences were found to be statistically
significant and the value of conditional gamma revealed the
strength of the relationship to be moderate (corrected x2:

4.14, df-l, p=.04, conditional gamma=.39).

53
Table 4.19 Relationship Between History of Drug Use and

Admissions of Employee Theft Controlling for Marital Status

 

 

 

 

Employee Theft History of Drug Use
Admissions Marijuana Only "Hard" Drugs

Single

Minor 62 30

Major 22 24
Married

Minor 32 14

Major 12 12

a=corrected x2=4.14, 1df, p=.04, conditional gamma=.39

b=corrected x2=1.82, 1df, p=.18, conditional gamma=.39

Use of Drugs on the Job. Controlling for age and
marital status had no effect on the relationship between
applicants who admitted using drugs on the job and admitted
amounts of employee theft. However, controlling the sex
of the applicant showed a significant effect, only for males
as shown in Table 4.20. Males who did not admit using drugs
on the job had more minor admissions of pilferage (63%) than
those who did admit using drugs on the job (39%). But,

61% of the males who admitted using drugs on the job had
major admissions of employee theft compared to only 37% for
males who did not admit using drugs on the job. These dif-
ferences were statistically significant and the value of
conditional gamma showed that the relationship was of moderate
strength (corrected x2=4.82, df—l, p=.03, conditional gamma=

.45).

54
Table 4.20 Relationship Between Use of Drugs on the Job and

Employee Theft Controlling for Sex

 

 

 

Employee Theft Use of Drugs on the Job
Admissions Ng ng
Male
Minor 115 11
Major 67 17
Female
Minor 81 7
Major 21 2

a=corrected x2=4.82, 1df, p=.03, conditional gamma=.45

b=corrected x2=0.0, 1df, p=1.0, conditional gamma=.05

Frequengy of Marijuana Use. An analysis of the data

 

distribution for admitted frequency of marijuana use and
the extent of admissions of pilferage with control variables
did show significant results in all three cases.

In the case of older applicants no significant effect
was found as shown in Table 4.21. Among younger applicants,
those who admitted using marijuana occasionally were much
more likely to have minor admissions of internal theft (93%)
than those who admitted using marijuana frequently (66%).
But, those males who admitted using marijuana frequently were
much more likely to have major admissions of theft from the
workplace (34%) than those who admitted using it occasionally
(7%). These differences were found to be statistically

significant and conditional gamma revealed that a strong

55
relationship existed between the variables (corrected x2:

6.33, df-l, p=.01, conditional gamma=.73).

Table 4.21 Relationship Between Frequency of Marijuana Use

and Admissions of Employee Theft Controlling for Age

 

 

 

 

Employee Theft Frequency of Marijuana Use
Admissions , Occasionally Frequently

Younger

Minor 25 71

Major 2 37
we

Minor 11 30

Major 3 25

a=corrected x2=6.33, 1df, p=.01, conditional gamma=.73

b=corrected x2=1.77, 1df, p=.18, conditional gamma=.51

As shown in Table 4.22, no significant effect was
found for females. Among male applicants, those that admit-
ted using marijuana occasionally were more likely to have
minor admisssions of pilferage (84%) than those who admitted
using marijuana frequently (56%). However, those males who
admitted using marijuana frequently were much more likely to
have major admissions of internal theft (44%) than those who
admitted using marijuana occasionally (16%). These differ-
ences were found to be statistically significant and the
value of conditional gamma displayed that a strong relation-
ship existed (corrected x2=5.52, df—l, p-.02, conditional

gamma=.61).

56
Table 4.22 Relationship Between Frequency of Marijuana Use

and Admissions of Employee Theft Controlling for Sex

 

 

 

 

 

Employee Theft Frequency of Marijuana Use
Admissions Occasionally Frequently

Male

Minor 21 63

Major 4 49
Female

Minor 15 38

Major 1 l3

a=corrected x2=5.52, 1df, p=.02, conditional gamma=.6l

b=corrected x2=1.69, 1df, p=.19, conditional gamma=.67

As shown in Table 4.23, no significant effect was
found in the case of married applicants. The data do reveal
that among single applicants, those who admit using marijuana
occasionally are more likely to have minor admissions of
theft from the workplace (89%) than those who admitted to
using marijuana frequently (61%). However, those single
applicants who admitted using marijuana frequently were more
likely to have major admissions of internal theft (39%)
than those who admitted using marijuana occasionally (11%).
These differences were found to be statistically significant
and conditional gamma showed that a strong relationship
existed between the variables (corrected x2=6.75, df—l,

p=.01, conditional gamma=.68).

57
Table 4.23 Relationship Between Frequency of Marijuana Use
and Admissions of Employee Theft

Controlling for Marital Status

 

 

 

 

Employee Theft Frequency of Marijuana Use
Admissions Occasionally Frequently
Steels.

Minor 25 66
Major 3 42
Married
Minor 11 35
Major 2 20

a=corrected x2=6.75, 1df, p=.01, conditional gamma=.68

b=corrected x2=1.26, 1df, p=.26, conditional gamma=.52

Chapter 5

Discussion

In this final section, results reported in Chapter
4 will be discussed and conclusions based on those findings
will be offered. It should be remembered that the purpose
of this project was to determine if an association existed
between admissions of employee theft and characteristics
of job applicants. Control variables including sex, age and
marital status were utilized to determine any influence on
admissions of internal theft.

The final part of this chapter will be recommenda-
tions for future studies. It will include a review of how
knowledge about employee theft might be expanded by scrutiniz-
ing variables more closely and by looking at variables that
previously may have seemed insignificant. Recommendations
evolving from this review will reflect variables that proved
significant in relationship to employee theft.

Age of the Applicant

 

Previous empirical studies concluded that younger
workers made significantly more admissions of internal theft.
In the current study, support for this association was found.
However, this association was found to be somewhat different
than what previous studies discovered. In studies such as
Franklin (1975) and Clark and Hollinger (1981), younger

58

59
workers were found to be overinvolved with employee theft
compared to older workers. Yet the data for this study
showed that younger applicants admitted more involvement in
minor employee theft whereas older applicants admitted more
involvement in major admissions of theft from the workplace.
Therefore, the conclusions drawn from previous studies do
not receive full support of the conclusions drawn from this
research project.

There are some plausible reasons why the results from
this study differ somewhat from previous studies. Whereas
previous studies used frequency or percentage of workers
involved in pilferage, this study used dollar amount as the
measurement of employee theft. Second, the age of the
applicants in this study tended to be quite young (median
age - 23, 36% age 21 or less). For a large number of younger
applicants in this project, it is possible they were
previously employed only part time, if at all, due to their
age. This length of employment may have been long enough
for involvement in minor, but not major, amounts of internal
theft. (Note: Applicant's length of previous employment was
not available for this project).

Among younger applicants, those that were single
admitted more involvement in pilferage than married applicants.
This finding supports the conclusions drawn by Clark and
Hollinger (1981) in their study. They believe that employee
theft always has and always will be proportionately higher
for younger, unmarried employees. Clark and Hollinger argue

that overinvolvement in theft from the workplace is simply

60
a function of "lesser commitment" to the organization and
"lesser social risk" to those employees involved in pilferage.
There are some sound, logical reasons why this may be true.
First, younger unmarried workers are occupationally mobile
and will not financially disrupt the lives of dependents upon
changing jobs. Second, changing jobs will not result in a
loss of career benefits or seniority rights. Finally, as
stated in Clark and Hollinger (1981), loss of employment as
punishment for internal theft does not affect younger employees
as it does older workers. Their reasoning is that younger
employees do not face a peer group that reacts strongly and
negatively to this type of punishment.

Admissions of Narcotics Use

 

The three areas that constituted admissions of
drug use will be discussed individually. Each of these
areas were found to have a statistically significant asso-
ciation with admissions of pilferage, but with varying
degrees of strength.

Use of Drugs on the Job. In past studies, research

 

has often been directed at past use of drugs by employees
(Terris, 1979; Terris and Jones, 1980) or at the percentage
of employees who have reported to work under the influence
of drugs (Clark and Hollinger, 1981 ). However, a study
directed at use of drugs while on the job and its relation-
ship to admissions of internal theft is unique.

The results of this study showed that admissions of
drug use on the job were related to admissions of internal

theft. A plausible explanation for this relationship is that

61
workers who use drugs on the job are not recreational
(occasional) drug users and therefore face higher costs for
obtaining drugs. Logically this relationship may be linked
to the higher costs of the drugs and/or the drug habit.

Frequency of Marijuana Use. The analysis involving

 

the applicants admitted frequency of marijuana use and employee
theft admissions revealed that a significant relationship
existed. Frequent users of marijuana had significantly more
major admissions of internal theft than any other type of
marijuana user.

This finding adds new knowledge to the literature on
employee theft. Various studies have reported the results
of drug use by employees and how it is related to theft from
the workplace. However, no study has singled out admissions
of marijuana use. From the findings of previous studies
(Terris, 1979; Terris and Jones, 1980) it would be expected
that frequent users of any drug would be overinvolved in
employee theft due to the higher costs of obtaining the
drugs. This finding is similar to the relationship discovered
between employee theft and use of drugs on the job as
described previously.

When looking only at those applicants who did have
admissions of internal theft it was revealed that as frequency
of marijuana use increased so did admissions of employee
theft. For younger and single applicants the relationship
was not only significant, but the measures of association

revealed that the relationship was strong. These types of

62
applicants were found to have significantly higher admissions
of pilferage than older or married applicants.

This significantly strong relationship can probably
be explained by two factors. First, younger and single workers
are the basis of Clark and Hollinger's (1981) "lesser commit-
ment" to the organization and "lesser social risk" hypothesis.
For these types of workers punitive sanctions have lesser
impact than on older and married employees. Secondly, these
applicants are also admitted frequent users of marijuana.
Therefore, they are faced with the need for extra income to
offset the high costs of obtaining the drug.

History of Drug Use. The applicants' admitted his-

 

tory of drug use showed a statistically significant effect in
relation to employee theft admissions. As applicant's admis-
sions of drug use increased from no use, to admissions of
marijuana use only to "hard" drugs, admissions of internal
theft increased. This relationship was found to be of
moderate strength.

This finding adds credibility to previous studies
which found a relationship between history of drug use by
employees and theft from the workplace (Terris, 1979; Terris
and Jones, 1980). The finding discovered in the current
study can be plausibly associated with one of the reported
factors behind the association between drug use and employee
theft. Logically as the admitted drug use increased from
no use or only marijuana use to using "hard" drugs, the cost

of buying the drugs would increase. Once again this indicates

63
that the applicant was faced with a need for extra money to
offset the high costs of the drugs and/or the drug habit.

A significant relationship was also found indicating
that single applicants had more major admissions of internal
theft than married applicants. This again positively reempha-
sizes the hypothesis that single workers are less responsive
to negative sanctions than are married workers (Clark and
Hollinger, 1981).

Summary for All Tests Relating to Admissions of Drug Use by

 

Applicants

 

The analysis of admissions of drug use by job appli-
cants revealed several points of interest related to the
literature on employee theft. First, the results of this
project show that an applicant can not be judged solely on
the type of drug used. The use of an accepted, widely used
drug (marijuana) and the use of "hard" drugs were both found
to be associated with admissions of internal theft. As
shown by the results for frequent users of marijuana - a user
of a widely accepted drug may be as overinvolved in admissions
of internal theft as a user of "hard" drugs. Yet it should
be noted that when these variables were tested in a bivariate
relationship (history of drug use), applicants who admitted
involvement in "hard" drugs made more serious admissions of
pilferage compared to marijuana users.

Secondly, it is suspected that frequency of drug use
plays an important role in the relationship with admissions
of theft from the workplace. This supposition was

definitively demonstrated in the results involving use of

64
marijuana, use of "hard" drugs and use of drugs while on the
job. The logic behind this supposition is that the frequent
user of any drug will be faced with higher costs for obtaining
the drug compared to an occasional user. In turn, those
frequent users will often need to find an additional source
of income to finance their drug of choice, possibly turning
to internal theft.

Type of Job Applied For

 

Based on the results of this project, no support was
found linking type of job applied for with admissions of
internal theft. This is in contrast to the study reported
in "Security World" (cited in Healy and Walsh, 1981) which
did find a relationship between the variables using different
standards of measurement. The "Security World" study examined
the background data of an applicant and determined what
percentage of the selected category (management, shop and
office or scientific and technical) was favorable or unfavor—
able. This study used tests of statistical significance
to determine if a relationship existed between the variables.
These contrasts may have contributed to the differences in
the findings.

Meaning of Findings

 

The findings of this project do have practical appli-
cation to the loss prevention manager. Many of these
applications revolve around admissions of drug use by the
applicant. There are two ways to obtain these admissions:

voluntarily and involuntarily.

65

Voluntary admissions could be obtained through pre-
employment screening of all applicants. Questions that
should be a part of this process include those concerning
past history of drug use, the frequency of use, and whether
drugs were used while on the job.

There would be two distinct advantages to having these
admissions available to the loss prevention manager. First,
if these admissions were available prior to the hiring
decision, the manager could recommend the applicant not be
hired due to history of drug use and increased probability
of involvement in employee theft. Secondly, if the applicant
were hired, then monitoring of the employees on the job
activities could be initiated. Therefore, the availability
of voluntary admissions may enable the loss prevention man-
ager of an organization to stop a problem before it starts.
This advance knowledge of "at risk" employees targeted during
the hiring process could be very advantageous.

Involuntary admissions although helpful, may be more
difficult for management to obtain since they may involve
the physical testing of the individual worker for drug use.
Organizations that have worked out an acceptable drug testing
program between management and labor could use this program
to identify employees who are potentially "at risk" for
internal theft. Employees who test positive for drug use
should be identified to the director of security so that
monitoring can be initiated.

Post drug test interviews can be used to help

identify other possible indicators of employee theft.

66
Questions used should include if drug use occurred on the
job and frequency of drug use regardless of location. It is
crucial that employees who are younger and/or single who
test positive be identified, since age and marital status
have displayed a strong relationship to theft from the
workplace.

Although the results obtained through this type of
involuntary admission in terms of identifying possible
pilferers cannot immediately be dismissed, it should be
recognized that the physical testing of employees for drug
use is currently in the midst of a raging civil rights
controvery.

Unexplained Findings

 

The following findings were determined to exist via
the results of this study. However, no previous literature
or sound logical supposition could explain why these rela-
tionships existed. These results will be reported as reference
for future empirical studies which may well determine the
same relationships exist.

1. Age and internal theft were found to be related.
This was found to be true only for males, not for females.
The strength of this relationship was found to be very
weak (see Table 4.7).

2. Use of drugs on the job and pilferage were found
to be related. This was found to be true only for males,
not for females. The strength of this relationship was

moderate (see Table 4.9).

67

3. Frequency of marijuana use and internal theft
were found to be related. This was found to be true for
younger, not older; male, not female; and single, not
married applicants. In all cases the strength of the rela-
tionships were strong (see Tables 4.21, 4.22 and 4.23
respectfully). 1
Recommendations for Future Research Projects on Employee Theft

In future studies research on the following items
might produce interesting and noteworthy results. In those
projects which choose to measure employee theft by dollar
amount, consideration should be given to standardizing
admissions of internal theft. This could be accomplished
by dividing admitted amount of internal theft by previous
length of employment. An annual average of pilferage would
allow for a better comparison between a twenty and a forty
year old applicant when considering total admissions of
employee theft.

When examining use of drugs on the job, consideration
should be given to separating admissions into categories.
One possible example would be to distinguish between appli-
cants who admitted using drugs considered widely accepted
(alcohol, marijuana) and those who admit use of "hard"
drugs (cocaine, heroin, etc.). This separation of type of
drug used on the job might follow the pattern established in
the current project by history of drug use and frequency of
marijuana use. If this recommendation was followed, it would

be expected that applicants who admitted using "hard" drugs

68
on the job would have significantly higher admissions of
internal theft compared to applicants who admitted using
drugs that were widely accepted.

Another variable in which further study might produce
noteworthy results is admissions of coming to work under
the influence of some type of drug. No attempt would be
needed to identify what type of drug was being used, rather
the applicant would be distinguished based on the frequency
with which they reported to work in this condition. Once
again it would be expected that the results shOuld parallel
those found on frequency of drug use during this project.

A study which would isolate admissions of cocaine
use from other drugs could produce interesting information.
Cocaine appears to be the drug of choice for the 1980's,
similar to marijuana for the 1970's. However, cocaine differs
from marijuana in two very significant ways relative to
studying employee theft. First, the cost of cocaine is
much higher. Even with the development of "crack" cocaine
the cost to an addict can become enormous. Secondly,
cocaine is considered a "hard" drug unlike marijuana. For
the current project both these points were linked to admis-
sions of theft from the workplace. Separating cocaine from
other drugs might produce interesting new information with
regard to its relationship to internal theft.

Future studies should also examine the effects of
alcohol use by applicants on admissions of pilferage. It

would be interesting to compare the results of alcohol use

69
to other drugs. As admissions of alcohol use increased,
it would be interesting to discover if admissions of theft

from the workplace also increased.

APPENDIX

APPENDIX

Questions Used During Pre-Employment Polygraph Examinations

Because the exact wording for each of the questions
used in a pre—employment polygraph examination varies with
each applicant, it was not possible to list each of these.
However, the standardized questions listed below are repre-
sentative of the major issues explored with each applicant
and should clarify the nature of this study. The words in
parentheses after the questions are examples of what each
question was designed to examine.

1. Did you deliberately falsify or conceal anything
in your job application? (Fired or asked to leave previous
job, health record, conviction record, leaving off prior
jobs, giving incorrect identification, indebtedness).

2. Have you stolen anything that you have not told
me about? (Shoplifting, general theft not connected with
employment).

3. In your past did you ever break any law, rule
or policy? (Traffic law, company policy).

4. Do you know of anything for which you could now
be wanted by the police? (Undetected crimes, unpaid parking
tickets, warrants).

5. While on the job did you ever use any type of drug
prohibited by the Department of Transportation?

70

71
6. Do you know of anything illegal that you have
bought or sold? (Drugs, jewelry, cars).
7.) In the past years did you steal more than
amount of money and merchandise from employers?
(Money, merchandise, unauthorized discounts, falsified

paperwork).

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